Petra Diamonds will acquire the Finsch diamond mine in South Africa from De Beers Consolidated Mines for R1.425bn ($210m).
Finsch is expected to produce over 1.5 million carrots per annum in its first full year of production, more than doubling the group's production of around 1.3 million cubic tons per annum.
With the acquisition, Petra will further diversify its portfolio, adding a second one million carats per annum mine, while Finsch will become its eighth diamond mine.
Finsch adds a major diamond resource of 48.1 million carats to Petra, including 26.6 million cubic tons of reserves, and will increase its gross resource base to about 309 million cubic tons with a gross attributable in-situ value of about $38bn.
Petra Diamonds' production, including that from Finsch, is expected to increase to around four million cubic tons per annum by 2014 and to over five million cubic tons per annum by 2019.